Do Retailers Need to Report Supply Chain Emissions?

The short answer: no small retailer has a legal duty to report supply chain emissions. Since the 2026 Omnibus changes, the Corporate Sustainability Reporting Directive (CSRD) applies only to companies with more than 1,000 employees and over €450 million turnover. Retail groups above that threshold can check their reporting timetable in the CSRD deadlines by country guide. What a small retailer or wholesaler may face instead is a customer asking for emissions data: a large retail group or brand that reports under CSRD and needs figures from its suppliers.

For most retailers and wholesalers, the majority of greenhouse gas (GHG) emissions come not from their own operations but from the supply chain: the production, transport, and disposal of goods. This guide helps small and medium-sized retailers and wholesalers understand when supply chain emissions (Scope 3) are worth reporting under the voluntary VSME Standard, and how to estimate them proportionately.

1. Understanding Scope 1, 2 and 3 Emissions

The GHG Protocol defines three “scopes” of emissions:

• Scope 1: Direct emissions from your own sources (e.g. gas heating, delivery vans).
• Scope 2: Indirect emissions from purchased energy (e.g. electricity for lighting and refrigeration).
• Scope 3: All other indirect emissions in your value chain — from suppliers, transport, and sold products. Learn more about what counts as Scope 1 vs Scope 2.

For most retailers, Scope 3 emissions make up more than 80% of their total footprint — from manufacturing goods to customer use and disposal.

2. What the CSRD Requires

Under Directive (EU) 2022/2464, as amended by Omnibus I, companies with more than 1,000 employees and over €450 million turnover must disclose material GHG emissions (Scopes 1, 2, and 3, where material) using ESRS E1 – Climate Change. That includes emissions linked to their suppliers, logistics, and downstream use of sold products.

Large retailers (e.g. supermarket groups, major wholesalers) will therefore need data from their suppliers, even where those suppliers are smaller businesses. This is where small and medium-sized retailers come in: you are not required to report under CSRD, but you may be asked by larger customers or investors for basic emissions information.

Two guardrails apply to those requests. EU law caps what a CSRD reporter may require from a sub-1,000-employee supplier at the VSME standard (the value-chain cap). Product-level Scope 3 data sits outside that cap, however, so customers who need it for their own footprints can still lawfully ask. See how one VSME report answers most ESG requests for how the cap works.

3. What the VSME Standard Says for Small Retailers

The VSME Standard (EFRAG, 2024) is a voluntary reporting framework for unlisted SMEs. It divides disclosures into two modules:

• Basic Module (B3): Requires reporting of Scope 1 and 2 emissions only — your direct and purchased energy emissions. See our step-by-step guide to reporting Scope 1 and 2 emissions.
• Comprehensive Module (C3): Adds Scope 3 (supply chain) emissions, required if you adopt this module, alongside GHG reduction targets.

In short:

You should report Scope 3 only if:

• It’s significant to your environmental impact (e.g. imported goods, outsourced logistics).
• It’s requested by major clients, investors, or lenders.
• You already collect relevant data (e.g. supplier sustainability info, transport fuel use).

4. How to Decide if You Should Report Supply Chain Emissions

a. Are You Legally Required?

You are only legally required if your business meets the post-Omnibus CSRD thresholds, and it must meet both:

• More than 1,000 employees, and
• Net turnover above €450 million.

No independent retailer or wholesaler of SME size meets these thresholds. If you are unsure, see Is my company too small for CSRD?

b. Are You in a Supply Chain with CSRD Companies?

If you supply or distribute products to large retail groups or manufacturers, they may ask for your emissions data as part of their own CSRD reporting.

In this case, using the VSME Standard — even voluntarily — helps you respond efficiently and maintain business relationships.

c. Do Your Customers or Lenders Ask for It?

Banks and corporate buyers increasingly request sustainability data. Having even simple Scope 1–2 data (and estimated Scope 3 where relevant) helps demonstrate preparedness and responsibility.

5. How to Estimate Supply Chain Emissions (Scope 3)

Small retailers can take a practical, simplified approach without full life-cycle analysis.

Step 1. Identify Your Major Supply Chain Emissions

Typical Scope 3 categories for retail include:

• Purchased goods and packaging (plastics, paper, textiles)
• Product transport and distribution
• Waste generated from sold products (e.g. packaging disposal)
• Business travel and outsourced services

Step 2. Use Public or Supplier Data

If you don’t have emission factors:

• Use supplier-provided data (e.g. “our packaging emits 1.2 tCO₂e/tonne”)
• Or use industry databases, such as the UK DEFRA or EU GHG Protocol factors.

Step 3. Use Spend-Based Estimates

If you can’t measure quantities, estimate emissions using spend-based factors (e.g. €1,000 of clothing purchases ≈ 150 kg CO₂e). This method is widely accepted for SMEs.

Step 4. Focus on the Biggest Impacts

Report approximate emissions for the top 2–3 categories that represent most of your purchasing or logistics impact.

Example: “Our main emissions sources are product deliveries (45%) and packaging materials (35%). Total estimated Scope 3 emissions: 240 tCO₂e in 2024.”

6. Example: Voluntary Scope 3 Reporting for a Small Retailer

Company: TrendWear Boutique Employees: 15 Turnover: €1.5 million Scope 1 (Heating & vehicles): 12 tCO₂e Scope 2 (Electricity): 8 tCO₂e Scope 3 (Suppliers, logistics, packaging): 95 tCO₂e (estimated)

Actions Taken:

• Moved to 100% renewable electricity.
• Asked main clothing suppliers for emissions data.
• Switched to recycled cardboard packaging.

Disclosure (in report):

“Although not required by law, TrendWear estimates that over 80% of its emissions occur in the supply chain. The company has begun collecting supplier data to improve accuracy and reduce logistics emissions.”

7. Benefits of Voluntary Supply Chain Reporting

• Keeps you competitive with sustainability-focused buyers.
• Simplifies responses to questionnaires from larger partners.
• Improves cost control, as emissions often mirror energy or waste inefficiency.
• Demonstrates readiness for future regulation or funding programmes.

8. Practical Tips for Retail SMEs

9. Summary: What Small Retailers Should Do

If your supply chain emissions are large or your customers request them, adopting the VSME Comprehensive Module can provide a structured, proportionate way to report them.

Frequently Asked Questions

Do small retailers need to report supply chain emissions for CSRD?

No small retailer is required to report under CSRD, which since Omnibus I applies only above 1,000 employees and €450 million turnover. Some may be asked for Scope 3 data by large buyers or investors who report under CSRD themselves. Under VSME B3, Scope 3 emissions are voluntary in the Basic Module and worth including when significant or requested. For retailers, supply chain emissions (from purchased goods, packaging, and logistics) are typically the most significant part of your environmental footprint.

Check if CSRD applies to your business →

How do I estimate supply chain emissions if I don’t have supplier data?

You can estimate supply chain emissions using spend-based factors (e.g., €1,000 of clothing purchases ≈ 150 kg CO₂e) or industry databases (e.g., UK DEFRA or EU GHG Protocol factors). Focus on the top 2-3 categories that represent most of your purchasing or logistics impact (e.g., product deliveries, packaging materials). Document your methodology and assumptions clearly in your disclosure.

Learn how to report energy use →

Can I report supply chain emissions qualitatively if I can’t quantify them?

Yes, if you can’t quantify Scope 3 emissions, you can describe your approach qualitatively in your VSME B2 disclosure. For example: “The company recognises that supply chain emissions are significant and is working with suppliers to collect emissions data. Priority is given to suppliers with sustainability certifications or emissions reporting.” A described approach is a legitimate, proportionate answer while the data matures.

How do I engage suppliers to get better Scope 3 data?

Ask key suppliers if they have sustainability data, emissions reports, or certifications (e.g., ISO 14001). Many suppliers now provide emissions data per product or per shipment. You can include a policy statement prioritising suppliers that report carbon emissions and commit to Science Based Targets or equivalent frameworks. Start with your largest suppliers and expand over time.

Key Terms

• CSRD – Corporate Sustainability Reporting Directive (EU 2022/2464), applying since Omnibus I only to companies with more than 1,000 employees and over €450 million turnover
• VSME – Voluntary Sustainability Reporting Standard for SMEs (EFRAG, 2024)
• Value-chain cap – The Omnibus I rule limiting what a CSRD reporter may require from sub-1,000-employee suppliers to the VSME standard
• Scope 1, 2, 3 – Categories of greenhouse gas emissions under the GHG Protocol
• ESRS – European Sustainability Reporting Standards (mandatory under CSRD)
• SME – Small and Medium-Sized Enterprise
• Supply Chain Emissions – Indirect GHG emissions from purchased goods, services, and logistics
• Turnover – Total annual revenue from business activities

To focus your supply chain emissions reporting, see our Scope 3 categories guide for SMEs. If a customer request is the trigger, a free VSME report tool can generate a finished Basic or Comprehensive report at no cost, and an ESG answer bank stores the figures for reuse across future requests.